This is a slightly revised version of a piece that appeared on the Washington Post's The Hearing today.

In her testimony before the Joint Economic Committee today, Dr. Romer, Chair of the CEA, presented an explication of the progress of the financial crisis and the economic downturn, the anticipated effects of the measures undertaken and planned, and the outlook going forward. On most points, we're in agreement, so I'll only highlight some key issues of interest.

The outlook

I would characterize the description of the economic outlook as guardedly optimistic. We can't say much more, since Dr. Romer -- in line with historical practice -- did not provide specific forecast numbers associated with her testimony. She did indicate that the CEA forecast is in line with the Blue Chip forecast, of -2.1% annualized growth in 2009Q2 and leveling off in 2009H2. What specifically "in line" means is up for some debate; in

...

The following are some thought-provoking articles I have perused over the past few days that readers may also find of interest:

• Martin Wolf (Financial Times): What the G2 must discuss now the G20 is over, April 7, 2009. Given the scale of the world’s macroeconomic imbalances, it is far from obvious that higher regulatory standards alone would have saved the world. This is not just a matter of historical interest. It is also relevant to the sustainability of the recovery.

• Nicholas Taleb (Financial Times): Ten principles for a Black Swan-proof world, April 7, 2009. We need to return to a world in which entrepreneurs, not bankers, take the risks and companies are born and die every day without making the news.

...

A price tag has emerged for President-elect Barack Obama’s infrastructure stimulus, $850 billion, according to one of his advisers. His team calculates the figure is necessary to create 2.5 million jobs, improve an array of infrastructure projects, and bolster unemployment, health-care, and renewable energy programs, lawmakers told Bloomberg.

In the shorter term, U.S. Treasury Secretary Henry Paulson may ask for the other half of October’s $700 billion Troubled Asset Relief Program (TARP), money originally earmarked for bank rescue but now possibly a source for a highly anticipated auto bailout, Bloomberg also reported.

But for Obama to begin his spending spree, and for Paulson to continue his, each will genuflect before Congress to get the money. The combined total is about $1.2 trillion, but some analysts believe that figure could be higher.

Paulson says the money he’s requesting is urgent, and would be asking a Congress that officially isn’t in

...

As every woman who has ever had dealings with a man knows only too well, it is a lot easier for people to make promises than it is for them to keep them. And when Europe's leaders met in Paris on the 12 October, a lot of fine promises (which were all, surely, very well intentioned) were made. The reality of having to live up to them, however, is turning out, as might only have been expected, to be much more complicated.Basically, the kernel of the plan which is now being operationalised seems to have been thrashed out in Washington on 11 October, when key G7 leaders met with Dominique Strauss Kahn of the IMF, and it was decided to try and erect two great firewalls (corta fuegos) - at least as far as Europe is concerned. One of these was to be co-ordinated by the EU governments, ...

In the currency market, the dollar moved lower against the euro. Late Monday, the euro was trading at $1.3587 vs. $1.3394 on Friday.

Weren't as strong as some of us thought.

I was surprised; so were market observers. From Bloomberg:

U.S. Economic Growth Slower Than Initially Estimated (Update2)

By Timothy R. Homan

Sept. 26 (Bloomberg) -- The U.S. economy expanded more slowly than previously estimated in the second quarter, showing consumer spending was weakening before the credit crisis intensified.

The annual rate of 2.8 percent was down from a preliminary estimate of 3.3 percent issued last month, the Commerce Department said today in Washington. Measures of inflation were higher than previously projected. Personal consumption, trade and business investment contributed less to gross domestic product than the prior estimate, the report showed.

Americans have since cut back on purchases, businesses have put investment plans on hold, builders have scaled back and credit markets have seized up. Economists at JPMorgan Chase & Co. and Morgan Stanley this week cut third-quarter GDP forecasts and Federal Reserve Chairman Ben

...